Gold up on technical trading, weak dollar

Gold futures on the commodity exchange (COMEX) division of the New York Mercantile Exchange rose as technical trading and a weaker dollar caused a slight bounce in the precious metal.

The most active gold contract for August delivery rose $2.6 (0.24 percent), to settle at $1,094.10 per ounce, Xinhua reported.

Despite the slight increase caused by technical trading, gold was prevented from bouncing higher as a report by the US Department of Labour showed jobless claims hitting a 42-year-low. Initial jobless claims fell by 26,000 during the July 18 week to 255,000. This was unexpected, and analysts said that it may affect the July jobs report.

Gold was lent some support as the dollar Index fell by 0.39 percent to 97.07 as of 1808 GMT. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall.

The precious metal has been kept low by expectations for an increase in the US Federal Reserve’s interest rate. An increase in the Fed’s interest rate drives investors away from gold and towards assets with a return, as gold bears no interest. There has not been an increase in the Fed’s interest rate since June 2006, before the beginning of the American financial crisis.

Silver for September delivery fell 2.9 cents (0.20 percent), to close at $14.701 per ounce. Platinum for October delivery added $1.2 (0.12 percent), to close at $981.10 per ounce. (IANS)